Travel Agents Losing Sales to Web

The nation’s travel agents lost new ground to the Internet last year, according to a survey released Tuesday, as more and more travelers researched and booked trips online--a trend that is expected to triple over the next four years.

While the study from Washington, D.C.-based Travel Industry Assn. of America came as no surprise to travel agents, industry observers said it nonetheless served as a sobering reminder for professional travel planners to redouble efforts to adapt to an increasingly cyber-driven marketplace.

“The travel agent industry has to get with it like everybody else,” said Paul Ruden of the American Society of Travel Agents, the agents’ trade group based in Washington. “The Internet is here to stay, and they’re going to have to learn to use it.”

The TIAA report found that last year more than 52 million travelers, more than 50% more than the previous year, used the Internet to plan a trip. Of those, nearly 17 million took the additional step of booking their own arrangements, an increase of 146% over 1998.

“The Internet and online services have become a powerful part of the travel experience,” TIAA president William Norman said.

They also have become a lucrative one. According to Internet market research firm Jupiter Communications, consumers purchased more than $4 billion in travel services on the Internet in 1999, most of which were airline tickets. That represented 3% of all travel-related purchases.

Jupiter travel industry analyst Melissa Shore said that travel-related sales on the Internet are expected to swell to nearly $17 billion and account for about 10% of all travel purchases by 2003.

But that doesn’t automatically spell lost revenue for travel agents, Ruden said. Part of that growth could be attributed to higher demand for travel, he said, and many of those online transactions might occur on the growing number of Web sites operated by travel agents.

Still, while Ruden points to statistics that 80% of all airline tickets are still purchased through travel agents, he said the industry as a whole has accepted that their dominance will be diminished every year as more and more consumers book online.

“Travel agents long-term cannot continue to depend on airline bookings as a significant revenue source,” he said. “It’s just not going to be there.”

According to Shore, that’s not necessarily bad. She said airline ticketing is a low-margin transaction that saps time travel agents could be devoting to higher-margin activities such as cruise and tour planning.

“If the travel agents are smart, they can certainly use the Internet to their advantage,” Shore said.

Four years ago, Northridge travel agent Susan Dushane relied on airline bookings for 75% of her annual sales. That figure is now closer to 60%, but Dushane would like to see it go even lower. “My time is far better spent booking cruises and tours for my clients,” she said.

Dushane sees the value-added aspects of travel agents such as their knowledge of tour companies and their willingness to shop for good deals as qualities the Internet will be hard-pressed to match.

The TIAA survey was based on a phone survey of 1,200 U.S. adults in August. TIAA is the trade group of the tourism industry, which includes hotel operators, car-rental firms, airlines and tour companies, among others.